Lockheed Aims to Conquer Markets Outside US

Lockheed Martin Corp., already the biggest U.S. weapons maker and largest provider of IT services to the U.S. government, wants to become a powerhouse in foreign markets such as the Middle East and India, a top executive said.

Lockheed made about 17 percent of its $47 billion of revenue abroad in 2012, or $8 billion, and will "absolutely" exceed its current goal of 20 percent, Pat Dewar, senior vice president for corporate strategy and business development, told Reuters.

The maker of the F-35 fighter jet and Aegis missile systems still lags rivals Raytheon Co., with about 26 percent of sales from abroad, and Boeing Co.'s defense division, which says about 42 percent of its backlog is outside the United States. Both rivals are targeting 30 percent foreign revenue.

"We're moving much more aggressively in the international domain," Dewar said at the Paris Airshow, without giving a new target. "We're going global in a much bigger way."

Lockheed and other big U.S. arms manufacturers are looking to exports and foreign markets to provide continued growth as U.S. military spending slows amid mounting fiscal pressures, and the end of the wars in Iraq and Afghanistan.

Lockheed is already working in 70 countries and has what it calls "home team capability" in Britain, Australia and Canada. Now it plans to pump up local operations in other areas such as the United Arab Emirates, Saudi Arabia, Japan and India.

"We are going to move the corporation from being essentially overwhelmingly U.S. with international sales, to being a healthy local delivery system in those countries where the governmental relations are strong, and where industry relations are strong or can be strengthened," Dewar said.

Lockheed hopes focusing more on local operations, rather than merely selling products or bringing in experts from U.S. sites, will give it the edge over its competitors, Dewar said.

In February, Lockheed opened new headquarters in Riyadh, in Saudi Arabia, and signed an agreement with Saudi Arabian Airlines to pursue opportunities such as a new training organization for the aerospace sector.

Lockheed has already sold its Terminal High Altitude Area Defense (THAAD) missile defense system to the United Arab Emirates, where it has a stake in a large aircraft maintenance and overhaul business.

CYBER SECURITY

Saudi Arabia is looking closely at the THAAD system and has been briefed by the Pentagon's Missile Defense Agency, he said.

In India, the company has a joint venture with Tata Advanced Systems for manufacturing airframe components for the C-130J, a large transport plane that Lockheed is selling to India.

"We think that's a base of operations and a base to expand from," Dewar said.

Lockheed also has a large industrial partnership with Italy's Alenia, a unit of Finmeccanica, for final assembly of the F-35, and just signed a similar deal in Japan with Mitsubishi Heavy Industries.

In addition to weapons-related work, Lockheed sees growing opportunities for civilian projects and already runs the census or manages postal systems in Britain, Canada and Australia.

Dewar sees Lockheed's strength as being able to apply experience managing logistics for big weapons systems to government IT, as it has done in the U.S., where it has been the government's top information technology provider for 18 years.

Cyber security is drawing particular interest from other governments, particularly in the Middle East and Asia, Dewar said, although he declined to identify specific customers.

Lockheed is one of the big players in the U.S. cyber market, where it provides a range of services for the military and intelligence services. Escalating cyber attacks against global computer networks, including Saudi Arabia's national oil and gas company, are generating demand for similar services overseas.

"Cyber could essentially be the door opener in many of these cases," Dewar said.

Lockheed Martin Corp., already the biggest U.S. weapons maker and largest provider of IT services to the U.S. government, wants to become a powerhouse in foreign markets such as the Middle East and India, a top executive said.